Total holiday retail sales are projected to increase 4.5% over previous holiday season, bringing holiday spending to $219.9 billion, according to projections by National Retail Federation.
“Although consumer spending has been inconsistent in recent months, we expect the holiday season to bring more stability to the industry,” said NRF chief economist Rosalind Wells. “Home-related merchandise and consumer electronics should do well this holiday season and trendy fashions should help spark clothing sales.”
A factor affecting holiday sales growth will be tough sales comparisons over the previous year, Wells says. Holiday sales growth of 5.1% in 2003 was easy to achieve since sales the year before rose a meager 1.2%. This year, it will be more difficult for retailers to achieve gains since the holiday season last year was solid.
Wells said economic factors affecting holiday sales this year will include higher energy costs, rising interest rates, geopolitical threats, and slow income growth.
NRF says holiday sales account for nearly one-quarter (22.83%) of annual retail sales.